Here's what Hillary Clinton and Donald Trump plan to do to grow the US economy

Those are the now famous words of James Carville, a former
strategist for President Bill Clinton, during the 1992 election;
they narrowed down just how important Americans' feelings about
their economic future were to the outcome of the election.

Once again, with Democratic nominee Hillary Clinton and
Republican nominee Donald Trump facing off in the 2016
presidential race, it appears that the economy will be a central
debate point of the election.

We've broken down the two candidates' policy proposals for the
economy on everything from Wall Street regulation to fiscal
policy. Using the campaigns' official positions as well as
statements from the candidates themselves, we look closely at the
details, and what economists have said about their potential
impact.

Skye Gould/Business Insider

Taxes

Trump's plan would move all Americans into three tax brackets,
down from the current seven. The top bracket for married joint
filers making more than $225,000 a year would pay 33%; the
$75,000-to-$225,000 bracket would pay 25%; and the under-$75,000
bracket would pay 12%. Right now, people who make under $75,00o
pay a 15% rate, while the top bracket — made up of those making
$466,950 — pays 39.6%.

According to
the Tax Policy Center, Trump's plan would incentivize
investment by businesses and individuals, but the benefits would
be offset unless there was a significant decrease in federal
spending. Currently, Trump's plan indicates that he would
increase spending.

The total impact of Trump's tax proposal would decrease GDP
growth by 4% over the next 20 years from the baseline scenario of
the current tax policies according to
the Tax Policy Center report.

Clinton's plan calls for increasing taxes for people who make
over $5 million a year by 4%, in what her campaign calls the
"Fair Share Surcharge." Additionally, Clinton would make it so
that people making more than $1 million a year do not pay an
effective tax rate (after deductions) under 30%.

U.S.
Democratic presidential nominee Hillary Clinton takes the stage
at a campaign rally in ClevelandThomson Reuters

For corporations, Clinton plans to prevent "inversions," in which
companies move their headquarters overseas in order to pay a
lower rate, and charge an "exit fee" on companies moving their
businesses outside the country.

According to
the Tax Policy Center, Clinton's plan would decrease
investment from the top earners but would also significantly
reduce the federal deficit.

"And the proposals would raise marginal tax rates on labor and
capital, thus reducing incentives to work, save, and invest among
high-income households,"
said the report. "The proposals would increase federal
revenues by $1.1 trillion over the next 10 years and would
therefore reduce future deficits and slow, somewhat, the
accumulation of public debt."

Job growth

Clinton has introduced a number of
measures to try to produce job growth. In addition to
investing in infrastructure and manufacturing, Clinton has
emphasized
ending "quarterly capitalism," which focuses on returns to
shareholders. Clinton
aims to get businesses to focus on labor and capital
investment by modifying capital-gains taxes, giving tax credits
for long-term investments and new hires, and "shedding a light"
on excessive stock buybacks.

"And here’s something that you don’t always hear enough of from
Democrats: a big part of our plan will be unleashing the power of
the private sector to create more jobs at higher pay," Clinton
said
in a speech on August 11. "And that means for us, creating an
infrastructure bank to get private funds off the sidelines and
complement our private investments."

Trump does not have a specific plan on creating job growth, but
his
policy positions are designed to increase jobs in the US. For
instance, Trump wants to decrease regulation on energy production
to create mining and energy-related jobs, which have been
decreasing in recent years.

"We are also going to fully capture America’s tremendous energy
capacity," said Trump
in a speech on June 28. "This will create vast profits for
our workers and begin reducing our deficit. Hillary Clinton wants
to shut down energy production and shut down the mines."

Also, Trump has said he wants to repeal Obamacare, which he said
would save 2 million jobs over the next 10 years. Trump has also
stated that his trade polices will lead to more manufacturing and
goods-based jobs in America.

Joe Raedle/Getty Images

Regulation on Wall Street

Clinton has said that she would strengthen regulation on
financial institutions and also crack down on nonfinancial
lending from the "show banking" sector. Additionally, Clinton's
plan calls for reducing compensation to executives at financial
institutions in the event of fines from regulators.

"While institutions have paid large fines and in some cases
admitted guilt, too often it has seemed that the human beings
responsible get off with limited consequences — or none at all,
even when they’ve already pocketed the gains," said Clinton in a
speech on July 13. "This is wrong, and on my watch, it will
change."

Trump, on the other hand, has called for
a repeal of the Dodd-Frank regulation that grew out of the
financial crisis, saying it has prevented banks from lending
money to average Americans. Additionally, Trump has called for a
"pause in all new regulation" and a review of existing
regulation, which would appear to include regulation on Wall
Street. Trump has been critical of hedge fund managers, saying
they
"get away with murder." But it is unclear what he would do to
address the issue. In his economic vision on the campaign
website, there is
no mention of either Wall Street or Dodd-Frank.

"Dodd-Frank has made it impossible for bankers to function," said
Trump
told Reuters in May."It makes it very hard for bankers to
loan money for people to create jobs, for people with businesses
to create jobs. And that has to stop."

Trade

One of the largest differences between the candidates has been
their ideas on global trade.

Trump has been mostly protectionist, saying that existing trade
deals have taken manufacturing out of the country while railing
against free-trade agreements like the North American Free Trade
Agreement (NAFTA) and the proposed Trans-Pacific Partnership
(TPP). At one point in the campaign, Trump suggested a 45% tariff
on all Chinese imports. While he later went back on the idea,
Trump has been adamant in his assertion that China is
"sucking us dry."

"When Donald J. Trump is president, China will be on notice
that America is back in the global leadership business and that
their days of currency manipulation and cheating are over,"
reads the
Trump campaign's website. "We will cut a better deal with
China that helps American businesses and workers compete."

Trump believes that negotiating new deals could be
beneficial, and the US could "win" at trade under his
presidency.

Meanwhile, Clinton does not have a specific trade plan but has
pledged to fight the TPP, a deal she once helped to create. In
general, Clinton has shifted from pro free trade to something of
a trade skeptic.

"My message to every worker in Michigan and across America
is this: I will stop any trade deal that kills jobs or holds down
wages, including the Trans-Pacific Partnership," said
Clinton during
a speech in Michigan in August. "I oppose it now, I'll oppose
it after the election, and I'll oppose it as president. As a
senator, I fought to defend New York's manufacturers and steel
makers from unfair Chinese trading practices."

Fiscal policy

Republican presidential
nominee Donald TrumpMark Lyons/Getty
Images

Both candidates have
emphasized the importance of investing in American
infrastructure and spending federal money on projects. Trump has
said that the country needs to rebuild "crumbling" roads and
bridges, while Clinton has similarly said that rebuilding
infrastructure is key to America's future.

Clinton's plan calls for a five-year, $275 billion investment
into a variety of projects, including airport modernization and
Wi-Fi accessibility in rural areas.

"So we have to rebuild the infrastructure we have, and we
have to build a stronger future together because every community
in our country, every single one of them, deserves clean water,
clean air, clean energy, and think of the millions of people we
can put to work, including some of those laborers right down
there in the front," said Clinton during
a speech in California in July.

The plan would give private firms an 82% tax break after asking
for an initial investment to build revenue-generating
infrastructure projects such as toll roads and airports. The
Trump campaign said this would require no corresponding tax
increases.

What economists say

A number of Wall Street researchers have weighed in on the
economic plans of Clinton and Trump. The consensus is that
Clinton's plan would roughly maintain the status quo from
President Obama's tenure.

"Our expectations for a Clinton presidency do not require
changing our outlook for growth, policy, earnings, and
inflation," said James Sweeney, chief fixed-income economist at
Credit Suisse.

If Clinton is able to follow through on all her stated goals,
however, it could put pressure on business investment and keep
economic uncertainty high enough to curb some growth.

"How left of center Clinton is once in office will determine the
degree to which uncertainty drag diminishes post-election," wrote
Dana Peterson, a North American economist at Citi in a note to
clients in August. "Uncertainty could remain elevated or even
increase if Clinton pursues the more populist aspects of her
campaign platform (e.g. 'America First' attitude towards trade,
aggressively higher taxes, more intense regulation of the
financial sector, leaning too hard on China)."

Economists have taken a more extreme
view of Trump's plans. Most economists have warned that
there could be serious negative shocks to the country's economy
under a Trump economic plan.

Kevin Logan, chief US economist at HSBC, said that the
implementation of Trump's trade policies would lower exports
and increase the cost of goods in the US, which would be a
serious shock to economic growth.

"While tax cuts that were implemented in the first year of a
Trump administration might give GDP a short-term boost for a
year or so, the combined supply shock from a contraction in the
labor force and from the disruption to international trade
would likely put the economy into a recession after a year or
two," said Logan in a note to clients.

Both
Mark Zandi, chief economist at Moody's analytics, and
William Buiter, chief economist at Citi, agreed that the
combined trade shock and increased deficit from the full
implementation of Trump's plans would lead to a recession.

Additionally, a number of business leaders, such as
T. Boone Pickens and
Carl Icahn, have said that Trump's stance on regulation
would increase business investment.

Both candidates have had a large swath of academic economists
come out against them.
Nearly 400 economists wrote a letter in the Wall Street
Journal claiming that Trump has misled the American public on
everything from trying to discredit official unemployment
statistics to the decline in manufacturing in America.

"Donald Trump is a dangerous, destructive choice for the
country," said the economists. "He misinforms the
electorate, degrades trust in public institutions with
conspiracy theories, and promotes willful delusion over
engagement with reality."

On the other hand,
305 economists also wrote a letter in September calling out
the failings of Clinton's plans saying her "outdated
policy prescriptions won't return our economy to the faster
growth rates it once enjoyed."